Top stories before the bell on Friday

AbbyDeveney

Pre-Open stocks action

Stock futures signaled some profit-taking after a strong week for shares. M&A was in focus; Maytag surged more than 20% in pre-market trade as an investor group reached a deal to buy the appliance maker. Airlines are also expected to feature.

Global Markets

French GDP was lower than expected in April, taking a shine off Continental share trading. Shares in London were lifted by telecoms and oil majors. Investors in Asia took a breather, with most indexes ending lower.

Broker Action

Prudential Equity Group downgraded American Eagle Outfitters
AEOS
Abercrombie & Fitch Co.
ANF, +1.95%
and Pacific Sunwear of California
PSUN
-- all to underweight -- and reiterated an underweight call on Aeropostale
ARO, +11.11%
on concerns that a denim glut will hit the back-to-school market. "We learned from our sources that Abercrombie & Fitch has been trying to cancel denim orders with their vendors," it added. The company confirmed to Prudential that it "looked to have some deliveries pushed off to future periods."

Morgan Stanley trimmed its earnings-per-share forecasts for Citigroup
C, +0.18%
but held an overweight rating. "Higher bankruptcy filings and minimum payment charges in the U.S. portfolio are likely to have a greater near-term impact on NCO's than we anticipated," the broker said. It reduced its 2005 earning-per-share estimated by 6 cents to $4.04 per share and by 12 cents in 2006 to $4.53 per share.

UBS upgraded Symantec Corp. (SYMC) to buy from neutral on Friday. The bank said it made the change based on its belief that street estimates could rise as investors begin to look past 2005 and roll estimates forward to reflect the "roughly $1.20 to $1.30" in earnings power that the technology company could deliver in 2006

America West Holdings
AWA, -0.69%
and bankrupt US Airways Group
UAIRQ
have teamed up, announcing a merger that the two carriers say gives them a better shot at surviving brutally high jet-fuel prices and cutthroat competition in the overcrowded field. The new airline will operate as US Airways but will be run by America West CEO Doug Parker. He will be at the helm of a Tempe, Ariz.-based nationwide carrier capable of earning a profit even with oil prices above $50 a barrel, the companies said in announcing the merger.

Appliance maker Maytag Corp.,
MYG, -4.17%
a stalwart but ailing icon of American reliability, surged 20% in pre-market trading after saying its board has agreed to a $2.1 billion buyout stitched together by a group of private investors. After the closing bell, the Newton, Iowa-based company said the group, led by Ripplewood Holdings LLC, will acquire all outstanding share of the company for $14 a share, a $2.44 per-share, or 21%, premium to Maytag's $11.56 closing price. The price tag includes taking over $975 million of Maytag debt.

Occidental Petroleum
OXY, +0.84%
said it is buying an interest in oil and gas production from Exxon Mobil
XOM, +0.94%
in west Texas for about $972 million. Occidental expects the acquisition and another potential deal to boost its proved reserves by at least 130 million barrels of oil equivalent and to add 26,000 barrels of oil equivalent per day to its 2005 exit rate. The deal is expected to immediately boost earnings.

Imperial Sugar Co.
IPSU
said it received an unsolicited acquisition offer from Shultze Asset Management LLC for $176.5 million, or $17 a share. Shultze, a Purchase, N.Y.-based money-management firm, is the sugar company's second-largest shareholder, with 10.5% of its common stock, according to a filing with the Securities and Exchange Commission. Lehman Bros. Inc.
LEH
is the largest shareholder with 31.3%, according to the filing. The bid represents a 31% premium to Imperial's Thursday closing price of $12.93

French GDP rose 0.2% in the first quarter, slower than the 0.5% expected by economists. The data took a shine off share trading on Continental Europe. Fourth-quarter 2004 GDP was revised lower to 0.7% from 0.9%. Italy recently slipped into recession, while Germany posted a surprise 1% rise in first-quarter GDP.

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